Boulder continues to grapple with muni question

A decade-long debate again will head to Boulder voters

By Tatyana SharptonMay 21 2020

Boulder has long pushed for its environmental goals, and as the city moves forward in its attempt to create its own electric utility, it pursues a settlement with Xcel Energy. If it succeeds, Boulder could become the first Colorado city since Salida in 1974 to municipalize its electric system.

Boulder wants to create energy using a combination of wind, solar, storage, and natural gas.

The many who follow Boulder’s muni efforts know that Boulder ended its franchise agreement with Xcel Energy, its current supplier, in 2010. Since then, the city’s dual track has included both pursuing municipalization while negotiating with Xcel to adapt its services to meet city goals. Its primary goals boil down to decarbonization: reducing emissions and generating electricity used from renewable sources.

With Boulder’s motivators for a municipal utility extending beyond renewables, the city also has the option of participating in Xcel’s grid planning which would allow for a small, local micro grid of energy to operate independent of the main grid.

To take energy production into its own hands, Boulder would need to purchase Xcel’s assets — including electric poles, primary circuits, transformers, and other equipment — and its three substations, the parts of an electric system’s generation, transmission and distribution that transfer voltage from low to high, or vice versa.

A settlement with Xcel could end a decade-long debate and fulfill Boulder’s dream since the 60’s of moving away from fossil fuel consumption and operate its own, clean energy system.

Acquiring Xcel’s assets

As Boulder’s pro-renewable energy plan pushes ahead, the city plans to put a ballot question in the 2021 election that includes a dollar amount Boulder would pay Xcel to acquire its distribution assets and three substations, which it will interconnect. This question also includes costs for the city building three new substations.

After making two initial offers last year for Xcel assets, starting at $68.5 million and bumping that up to $82 million in June 2019, Boulder made a “final offer” of $94 million last November. While evaluating all the assets and items used to deliver electricity to Boulderites outside the three substations, Xcel’s assets appraised at nearly $30 million less than their offer.

Xcel Energy has not yet made a decision, claiming that its goal of 100 percent carbon-free electricity by 2050 “aligns with Boulder’s clean energy priorities,” which aim to reach 100 percent renewables by 2030. (By 2030, Xcel’s goal holds to 80% emission reduction.)

This November, Boulderites may get to choose if the city should get put back under a franchise agreement with Xcel.

When Boulder ended its franchise agreement in 2010, voters agreed to pay an equivalent utility occupation tax (UOT) to the city’s general fund rather than paying roughly $4 million a year to Xcel. In 2011, voters passed to pay a little extra from 2012 to 2017 with the extra funds going toward Boulder’s muni effort.

Of the $25 million generated, Boulder had spent $21.3 million of it through 2019.

The city had planned to extend the UOT funding the muni startup, but after Covid-19 derailed resident-led initiative petitions with its economic implications, council reconsidered making the request of Boulder’s residents.

Based on the figures in the 2021 ballot question, voters can decide if Boulder should officially drop the investor-owned utility and form their own energy system, a longtime goal of city officials and the many residents who want to go fully green. At latest, Boulder expects a no/go vote by the end of next year.